The financial institution shall have an effective Board to direct its activities, safeguard its interests, and develop its values. The Board shall bear responsibility for its businesses, even if it delegates committees, agencies, or individuals to exercise some of its powers. In all cases, the Board may not issue a general or indefinite delegation. It shall:
|
| 30. | Form the executive management, regulate, monitor and supervise its operating procedures, and ensure its performance of the tasks assigned thereto.
|
| 31. | Set and monitor the implementation of the plans, policies, strategies and main objectives of the financial institution, and review same on a regular basis.
|
| 32. | Ensure the integrity and financial solvency of the financial institution, and maintain effective relationships with the supervisory authorities.
|
| 33. | Set and comply with clear limits for responsibility and accountability at all levels of the financial institution. Responsibilities shall be completely separated at the level of the executive management.
|
| 34. | The organizational structure of the financial institution shall determine the competencies and the distribution of tasks between the Board and the executive management as per the best governance practices, improve the efficiency of decision-making, and achieve balance between powers and authorities. In order to achieve this, the Board shall:
|
| | a. | Approve and develop the internal policies related to the financial institution’s business; this shall include defining the tasks, competencies and responsibilities assigned to the various organizational levels;
|
| | b. | Approve a written and detailed policy that defines the powers delegated to the executive management, provided that it includes an account of each power, its method of implementation, and delegation period; it may request the executive management to submit periodic reports on its exercise of the delegated powers;
|
| | c. | Determine the issues that it has the power to decide on.
|
| 35. | Ensure the adequacy of human and financial resources to achieve the main objectives and plans of the financial institution and carry out its obligations.
|
| 36. | Ensure the existence and development of effective units for compliance, internal auditing and risk management, make sure that such departments are independent from business departments, ensure the availability of the adequate powers and resources therein, and train their staff and develop their capabilities in the field.
|
| 37. | Develop and monitor the implementation of a comprehensive risk management strategy and policies in proportion to the nature and size of the financial institution’s activities, and review same on an annual basis, taking into account to link the level of risks that the financial institution desires to bear in a specific period of time with its strategy and capital plan.
|
| 38. | Ensure the existence of an effective system for an objective and systematic performance assessment of the financial institution's employees at all levels. The performance assessment of the executive management shall specifically be long-term, and shall not be limited to the performance of a single year only.
|
| 39. | Select senior executives, and ensure that an appropriate replacement policy is applied and that the substitute is highly qualified and possesses the required skills.
|
| 40. | Notify the Central Bank in writing of any penalties imposed by any supervisory, regulatory or judicial authority that may affect the functioning of the financial institution, within a period of ten working days as of the date of the penalty.
|
| 41. | Ensure the independence of the internal and external auditors, and the accuracy and integrity of the information and data to be disclosed in accordance with the disclosure and transparency requirements.
|
| 42. | Be aware of the main risks that may affect the financial institution and its affiliate companies, and exercise an appropriate supervisory role over these companies, taking into account the legal independence and governance requirements of these affiliates.
|
| 43. | Set a clear written policy to deal with actual or potential cases of conflict of interest that may affect the performance of members, executive management or other employees of the financial institution upon dealing therewith or with other stakeholders, provided that said policy at least includes the following rules:
|
| | a. | Emphasize that members, senior executives and other employees of the financial institution avoid situations that may lead to a conflict of their interests with those of the financial institution, and deal with such cases as per the provisions of the relevant laws and regulations;
|
| | b. | Provide illustrative examples of conflict-of-interest situations that are relevant to the nature of the financial institution's activities.
|
| | c. | Set clear procedures for disclosing conflict of interest in businesses over which a conflict of interest may arise, and obtain the necessary license or approval;
|
| | d. | Make sure to constantly disclose any situations that may lead to a conflict of interest or upon the occurrence of such conflicts;
|
| | e. | Abstain from voting or taking part in decision-making when there is a conflict of interest;
|
| | f. | Set clear procedures when the financial institution enters into a transaction with a related party. Said transactions shall be carried out on a commercial basis only, and shall include notifying the public and the Central Bank without delay about this transaction if it is equal to or exceeds 1% of the total revenues of the financial institution pursuant to the latest annual audited financial statements.
|
| 44. | The Board shall not be exempted from responsibility, and shall be held accountable in the event that the operations of the financial institution are outsourced to another party; it shall be aware of the risks arising from the assignment process and shall ensure that the assignment operations be governed by the relevant Central Bank instructions.
|
| 45. | Evaluate the following on an annual basis:
|
| | a. | A member’s performance; this evaluation may be assigned to an external party to ensure its objectivity;
|
| | b. | Effectiveness of the controls, working procedures, structure, and composition of the Board, together with identification of weaknesses and making the necessary changes when required;
|
| | c. | Effectiveness of the applicable governance policies and procedures and practices; it shall be determined whether they require any improvements or changes. The findings of these assessments shall be used by the Board as part of its ongoing improvement efforts, even if it is required to share such results with the Central Bank.
|
| 46. | Subject to the relevant Central Bank instructions, the Board shall ensure the operation and effectiveness of the following policies and procedures, including, for example:
|
| | a. | Policies and procedures for IT and cybersecurity governance;
|
| | b. | A policy for the professional conduct and business ethics to be applied in the financial institution;
|
| | c. | A policy defining the mechanism for reporting violations in the financial institution and protecting whistleblowers;
|
| | d. | Policies and procedures for resolving complaints and objections that may arise between the financial institution and stakeholders;
|
| | e. | Policies and procedures to maintain the confidentiality of information.
|
| 47. | Approve the remuneration policy for the financial institution employees, which shall include, at a minimum, the types of remuneration (e.g. fixed or performance-related remunerations, or remunerations granted in the form of shares).
|
| 48. | Verify the accuracy and integrity of the annual and quarterly financial statements and approve same before publication thereof.
|
| 49. | Form an appropriate number of committees - in accordance with the provisions of the 5th Principle herebelow - and approve their work regulations. As an exception, the nomination and remuneration committee and the audit committee shall be approved by the General Assembly. These regulations shall comprise specifying the tasks of each committee, its duration and scope of work, the powers granted thereto, the responsibilities assigned thereto, and the mechanism governing Board supervision of said committee. The Board shall constantly ensure that committee members exert serious efforts upon performing their work.
|
| 50. | Announce the Board committees, their scope of work, and the names of their members in the annual report of the Board. The Chairman of the Board shall provide the Central Bank with a list of these committees, their tasks, working procedures, and the names of their members.
|
| 51. | Without prejudice to the competencies of the Board of Directors, the Chairman of the Board shall undertake the following tasks:
|
| | a. | Chair the Board and supervise the effectiveness of its workflow, and perform his competencies effectively;
|
| | b. | Ensure that all Board members have timely access to complete, clear and correct information;
|
| | c. | Represent the financial institution before third parties in accordance with the provisions of the relevant laws, regulations, and instructions, as well as the provisions of the financial institution's bylaws;
|
| | d. | Encourage effective participation between the Board and the executive management;
|
| | e. | Oversee the drafting of the Board meeting agenda, taking into account any point raised by a Board member or auditor, and consult with the members upon preparing the meeting agenda.
|
| 52. | Ensure that the financial institution adopts social responsibility programs, in line with the social responsibility policy approved by the General Assembly, and that the objectives of these programs are directed towards supporting various social projects, increase financial awareness, meet the credit needs of the local economy through granting loans and facilities for productive businesses, and innovate products that encourage economic development without compromising the solvency of the financial institution and stakeholders.
|
| 53. | Ensure that the services rendered by the financial institution meet the needs and requirements of society at fair costs, and that the financial institution takes the initiative to provide facilities to support and encourage small and medium enterprises. |
